PGIM Active Aggregate Bond ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy gets an Average Process Pillar. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in A rated bonds and an overweight in debt with 10- to 15-year maturities compared with category peers. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's style-agnostic investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time. PGIM Active Aggregate Bond ETF earns an Average Process Pillar rating.    The most important driver of the rating is the experience of the management team, which averages 22 years at this fund. Low costs across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also bolster the process. The pattern of low expenses at the firm suggests that it is focused on delivering strong results for investors. Lastly, the process is limited by the parent firm's five-year retention rate of 72%, which suggests it could do more to hold onto its portfolio managers.

 Compared with other funds in the Intermediate Core Bond Morningstar Category, this fund takes on lower credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Relative to the category average, the managers have been underweight A rated bonds in recent years. In the latest month, the strategy has also relatively underweighted A rated bonds compared with Morningstar Category peers. Additionally, there's been a bias towards debt with 10- to 15-year maturities over the past few years. Compared with category peers, the strategy had more exposure to debt with 10- to 15-year maturities in the most recent month. Finally, during the past few years, the fund leaned towards securitized debt. In this month, the strategy also leaned more towards securitized debt compared with its peers.

 This strategy's 12-month yield is 3.8%, higher than its average peer's 3.6%. It also has a 4.5% 30-day SEC yield (a measure similar to yield-to-maturity). Typically, higher yields come at the cost of higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher than the average yield of its Morningstar Category peers. The portfolio has a higher average surveyed credit quality of AA, compared with the category average of A, and it holds no non-investment-grade assets, despite the average peers' 1%. Strategies with lower credit risk can typically withstand market turmoil more effectively.

Average

Process

PGIM Active Aggregate Bond ETF earns an Average People Pillar rating. Stewart Wong, the longest-tenured manager on the strategy, provides strong guidance, offering over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they currently manage is 2.0 stars, demonstrating underwhelming risk-adjusted performance. Stewart Wong has an experienced backdrop of support. The three listed managers boast 22 years of average listed portfolio management experience.  

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

PGIM, the asset-management arm of Prudential Financial, has an attractive investment culture that has resulted in a strong lineup of funds, especially in fixed-income and growth equity. It earns an Above Average Parent rating. 
The PGIM funds are subadvised by at-scale subsidiaries of the firm that manage over USD 90 billion in assets each, mainly through Jennison Associates, PGIM Fixed Income, PGIM Quantitative Solutions, and PGIM Real Estate. The first two of these are standouts. Jennison runs the firm's actively managed fundamental equity funds with an established, repeatable investment process; PGIM Fixed Income, which includes Morningstar's Fixed-Income Fund Managers of 2017, remains well-resourced and risk-aware, while the early-2022 broadening of the leadership team has set the stage for sensible succession planning. PGIM Quantitative Solutions and PGIM Real Estate don't stand out as much but are still solid, though the former has dealt with several key management departures in recent years.
PGIM's lineup of 100-plus funds and ETFs spans the globe, but the firm’s assets are concentrated in the United States. At the end of June 2022, funds globally totaled USD 169 billion, only about 13% of PGIM's $1.3 trillion total assets under management; the rest is mostly in institutional accounts and the general account of Prudential's insurance company.

Above Average

Parent

PGIM Active Aggregate Bond ETF

PAB is an actively managed fixed income fund that holds USD-denominated securities issued by both government and corporate entities. These securities must be investment grade and have maturities of more than one year.

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Investors continued to plow money into taxable (+$32.0 billion) and tax-exempt (+$4.8 billion) bond funds (including ETFs) for the month of September. For the month, the average taxable and tax-exempt fixed income mutual fund posted a 0.48% and 0.75% decline, respectively, for September and are up 0.50% and 1.27% so far this year.

Despite Inflationary Concerns, Investors Favor Fixed Income Funds In September

MELBOURNE--(BUSINESS WIRE)---- $PAB #antibody--Patrys Limited (ASX:PAB), a therapeutic antibody development company, has announced the publication of preclinical data for its therapeutic antibody candidate PAT-DX1 in The Journal of Clinical Investigation—Insight. Patrys is developing PAT-DX1 for use in DDR-deficient cancers, including a range of primary brain cancers and metastases. PAT-DX1 is a cell-penetrating autoantibody that localizes into live cell nuclei, inhibits DNA repair, and is synthetically lethal to

Patrys Limited Announces Publication of PAT-DX1 Preclinical Data in JCI - Insight

On Thursday, PGIM Investments expanded its ETF lineup with the launch of the PGIM Active Aggregate Bond ETF (NYSE Arca: PAB). PAB is an actively managed fixed income ETF seeking total return through a combination of current income and capital appreciation.

News for PGIM Active Aggregate Bond ETF ETF (PAB)